`China favours normalisation of Indo-Pak ties`

Lahore: India and Pakistan have made "huge strides" in normalising trade relations in the span of just a year but the two countries should not be complacent as non-state actors are determined to harm the bilateral peace process, Prime Minister Yousuf Raza Gilani said on Monday.

Gilani made the remarks while addressing a conference of top businessmen of the two countries in the capital of Punjab province.

He said improved ties with India "are important for us as it offers a billion-plus market to the Pakistani exporters".

The Premier said that over the past 12 months, the two countries had "moved fast not just to normalise relations but remove those irritants which hamper trade and economic relations".

"It was in April 2011 when the two countries announced their intention to normalise bilateral trade relations. And by April 2012, we have made huge strides in this direction," he said.

Pakistan decided to scrap the positive list regime for imports from India and replace it with a negative list and the Wagah-Attari Trade Gate, which opened recently, will go a long way in boosting the volume of trade, he said.

At the same time, Gilani warned, the two sides must remain vigilant to thwart elements that could endanger the peace process which resumed last year.

"I must caution that recent successes do not mean that we should become complacent. We face many challenges and threats from forces inimical to peace," he said.

"We are passing through turbulent times in our history in which non-state actors are determined to harm the peace process. Such forces are present on both sides of the border and we have to remain vigilant that they are not able to derail our hard earned gains," he said without giving details.

Gilani said he had extended "unwavering support" to peace and people-to-people contacts. "Notwithstanding the ups and downs in our bilateral
relations, our support to the cause of peace and normalisation of relations with India has remained steadfast," Gilani said.

"This is because trade between our countries is to our best advantage. Let me add here that Pakistan`s closest friend and strategic partner, China, is also in favour of our normalisation of relations with India," Gilani said.

Welcoming India`s announcement about allowing foreign direct investments from Pakistan, he said his government was now awaiting "some practical steps" by New Delhi to remove non-tariff barriers that hamper Pakistani exports to the Indian market.

Gilani listed steps taken by his government to revive Pakistan`s struggling economy that was hit by the global financial crisis and natural disasters in recent years.

He said the government had pushed a reform agenda and stayed committed to policies of economic liberalisation, deregulation and privatisation.

Though Pakistan achieved record exports of USD 25 billion in the last fiscal year, the country cannot realise its full potential without enhancing regional trade, he said.

"Therefore, improved relations with India are important for us as it offers a billion-plus market to the Pakistani exporters," he remarked.

There are many sectors with huge trade potential and opportunities for collaboration, including IT, engineering, education and health, and a liberal trade regime will ensure the flow of cheaper imports for both countries due to their geographical proximity and lower freight costs, Gilani said.

"Our textiles, I am told, have a huge market across the border. Similarly, India can get buyers for its chemicals, pharmaceutical items, engineering goods (and) cement among many others," he said.

Gilani also said poverty, disease and ignorance should not be the "fate of the peoples of the two countries anymore".

The region, where more than one-fifth of the world population resides, is fast becoming a key driver of the global economy, Gilani pointed out.

"The engine of economic growth is not fuelled by regional tensions and conflicts. It needs peace and enabling environment. There is no denying the fact that social wellbeing of our people depends on normalisation of relations between both countries on a sustainable basis," he said.

President Asif Ali Zardari`s visit to India last month and his meeting with Indian Prime Minister Manmohan Singh as well as a series of meetings between the Premiers of the two countries were aimed at "pushing the peace process forward and ensuring that it gathers an unstoppable momentum", he said.

As Pakistan`s democratic government enters the final year of its five-year term, "improved relations with India is one of our cherished goals to which we continue to make considerable progress", Gilani said.

"On behalf of the people and government of Pakistan, let me make it clear that we want all our core issues settled through dialogue on equitable basis. We want to start a new era of economic collaboration with India as well as enhanced people-to-people contacts so that we leave behind a legacy of peace and prosperity for our future generations," he said.

The businessmen of the two countries are the "best ambassadors of peace" and have an important role to play in furthering the bilateral relationship and building foundations of a durable peace, he said.

"I see you as champions of peace and proponents of prosperity. The time for the prophets of doom and gloom is now over. We must learn from history. We must pay heed to the voices and aspirations of our people. We must all work for their welfare and economic empowerment," Gilani said.

Earlier this year, Pakistan switched from a positive list regime to a negative list regime for trade, paving the way for giving Most Favoured Nation-status to India by the beginning of next year.

However, senior Pakistani officials have linked the move to the removal by India of what they describe as "non-tariff barriers".

Following the decision to normalise trade relations, the two sides agreed to boost the volume of trade from the current level of about USD 2 billion a year to USD 6 billion by 2014.